The CEO of a major client caught me off guard a while back with a profoundly simple, yet incredibly complex question: “What are the two most important principles for integration success?”
Admittedly, I had to fight the urge to respond flippantly with some blather about “communications, synergies and getting the people issues right.” All of these are correct, of course, and extremely important, but none of these rose to the level this executive was asking for.
When he noticed I was searching for the answer, he upped the ante: “And I’m not looking for a laundry list of ten things I ‘should do.’” Hmmm, thanks. That helped. Ever try describing a sky full of stars on a crystal clear night? That’s what I felt like.
"Even if you get the strategy and diligence 100 percent right, any integration is still subject to a multitude of failure factors.”
To even begin getting at a meaningful answer to that question requires you to cover a lot of ground and a lot of context, including:
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Failure can (and often does) occur at any phase of the process – strategy, due diligence and integration. If the strategic logic is flawed or the diligence is incomplete or inadequate, there is very little likelihood that either your integration will have the results you desire, or can be primarily blamed for any shortfall in results.
- Even if you get the strategy and diligence 100 percent right, any integration is still subject to a multitude of failure factors – any one of which could severely limit, if not disrupt, your intended results. My "laundry list" of typical failure factors is provided in the downloadable M&A PDF Principles for Integration Success. The inverse of each of these provides a really good starting point for what it takes to get integration right.
But to effectively answer the question my client was pushing for, I think you have to get down to the true bedrock “art and science” of M&A integration, the essential principals to ingrain into your organization’s M&A team. Here’s what I said:
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“The "art" is preserving, capturing and optimizing target value within the NewCo’s strategic context, while at the same time sustaining the core business and implementing change effectively."
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“The "science" is applying the technical skills required to drive a rigorous planning process and flawlessly executing the fundamentals with discipline.”